Review of the structure of LINK interchange Fees - Which? response

Introduction

• Which? welcomes the opportunity to respond to the PSR’s call for views on the review of the structure of LINK interchange fees.
• Which? strongly agrees with the PSR that everyone should have a good choice of payments and that there should be widespread geographic access to cash, including protecting the current spread of free-to-use (FTU) ATMs. This is particularly important in remote or low income areas where individuals’ needs for cash may be great, but where overall demand may not be sufficient to support FTU ATMs under the current LINK interchange model. LINK’s change to the interchange fee in January 2018 failed to protect consumers’ access to cash via FTU ATMs. There has been a net loss of approximately 5,500 FTU ATMs since January 2018, including the loss of 151 ATMs that had been designated protected.
• The loss of FTU ATMs is also accelerating with recent LINK figures showing month on month reductions of 400 to 500 ATMs - some closing and some converting to charging. The PSR needs to act as quickly as possible to protect free access to cash for all who need it. The PSR cannot just look at the LINK network in isolation. It must, as a minimum next step, commit to regulating both the structure and level ofATM interchange fees for all major UK ATM networks, not just LINK. Failing this we believe it will be necessary for the PSR, industry and other members of the JACSgroup to make a decision on whether a Universal Service Obligation (USO) will be necessary to protect consumers’ access to cash.
• Given the pace of change, it is also important that the PSR starts exploring how it can better support access to cash via other means, including ATM cash deposits, cashback at retailers’ tills, and other shared means of access to cash, such as the Post Office, new shared banking hubs, existing bank branches, or potential third party locations.
• Which? continues to believe that the government should make protecting access to cash a priority and put in place legislation to ensure consumers can access cash free of charge for as long as they need it. Which? will continue to engage with the PSR on this important issues for consumers and are happy for this response to be published.